Employers might benefit from balanced non-compete agreements

On behalf of of Arthur R. Lehman, L.L.C. posted in Employment Litigation on Thursday, September 22, 2016.

Employers in New York likely receive many resumes throughout the year and they select only a few people for interviews from those CVs. Usually, multiple interviews follow and screenings take place before an employee is selected, one who will hopefully enrich the working environment. Usually, employees are then given training regarding their tasks and then provided with detailed private information about the company they have joined.

When an employee leaves the company and joins a competing firm right after, the employer loses a valuable asset who is fully trained and who may know various trade secrets. This is why more employers are considering protecting their investment and secret information by entering into non-competeagreements in their employment contracts. If the agreement is valid, it can restrict the employee from working for a direct competitor for a specific period of time after their employment comes to an end.

Although many people believe a non-compete agreement exists to punish or prevent an employee from leaving their company, in reality it serves to protect confidential information and makes business sense for employers to create. Not every non-compete agreement is enforceable-in order to be valid an agreement must be reasonable in terms of the length of time the employee is prevented from working for a competitor, the geographical area the agreement covers and the types of businesses the employee is prohibited from working in.

There is a high value in people being able to freely choose how to earn their living and anything arbitrarily infringing upon that is considered invalid in the eyes of the law. Therefore, it is essential for employers to create a balanced agreement that protects their interests and those of their employees.

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